Loyalty Draws A Stiffer Punishment Than Stealing From The Customers

BUSINESS

November 8, 1989|By Dick Marlowe of The Sentinel Staff

Lisa Ann Jones must be feeling like a real patsy today.

Among the cast of characters who have been raising havoc with the nation's financial markets, Lisa Ann Jones could be described as nothing more than a bit player. Her crime was lying to protect her employer. Her sentence was an 18-month prison term and a $50,000 fine.

On Monday, the justice system finally nailed the man she lied to protect, Bruce Lee Newberg, a former Drexel Burnham Lambert Inc. junk-bond trader convicted of securities fraud earlier this year. Newberg got three months in jail and a $165,000 fine. The judge did tell Newberg that he will also have to forfeit $200,000 of the money he made helping Drexel manipulate stock prices and creating fraudulent tax deductions.

Lisa Ann Jones ran away from home at the age of 14 to seek her fortune. By the time she had reached her mid-20s, she was knocking down $100,000 a year as an assistant trader at the Beverly Hills office of Drexel - working for Bruce Lee Newberg. During a grand jury investigation into trades involving Drexel, Jones said she did not recall any discussions about stock ''parking'' in connection with Princeton/Newport Partners Inc.

Stock parking is a serious no-no, for it involves concealing the identities of the people who own the stock. Anyhow, the records proved that she had handled some of the stock-parking transactions, and her bad memory earned her the 18-month sentence. Judging from the two sentences, our justice system feels that her crime was worse than his. When Jones was sentenced back in August, the judge explained that she got a prison term because lying to the grand jury ''posed a grave danger to law enforcement.''

But U.S. District Judge Robert L. Carter was a whole lot nicer Monday when the time came to sentence those who actually stole the money. The message that is being sent out to white-collar criminals from the case is that it is better to steal the money than to lie about it. The judge doubled the sentence of James Sutton Regan, the managing partner of Princeton/Newport, giving him an extra three months - not because he was the ring-leader but because the judge thinks Regan lied on the witness stand.

Judge Carter seems to have blown a good opportunity to send out quite a different message: that grand theft, fraud and market manipulation will not be tolerated and that those who steal the money will not only have to give it back but will be called on to do some serious hard time. The judge could have given Newberg and the four other officials of Princeton/Newport sentences of 20 years on each count and forced the five modern-day Wall Street bandits to forfeit more than $21 million in assets.

But the real shame of the judge's decision is that he refused to mete out stiff penalties based on federal racketeering laws under which the convicted criminals were tried. Is the judge saying that multimillion dollar swindlers should be given preferential treatment as long as nobody gets killed and they conduct their thefts like gentlemen?

Get serious, judge. The bums were convicted of 64 felony counts of conspiracy, racketeering and securities, wire and mail fraud. The solvency of the U.S. government itself, along with the stock market, pension funds and financial institutions, are being systematically destroyed by smug, white-collar gentlemen racketeers whose actions are a far greater threat to the United States than Al Capone ever dreamed of being.

There is nothing the gentlemen criminals fear more than having the Racketeer Influenced and Corrupt Organizations law, known as RICO, used against them, not so much because it brands them as the heartless racketeers they are but because it carries the most dreaded of all penalties: total restitution and the seizing of assets.